Koch vs. Cato

The other thing that happened while I was on the road this week was not so fun: The Koch brothers filed a lawsuit against the Cato Institute seeking control of the think tank. I was, in fact, visiting Cato the day the news broke. Though Charles Koch was an early funder of the institute, in recent years the Kochs have focused their energies elsewhere while Cato, led by Ed Crane and others, blossomed into a respected, non-partisan think tank.

And so, with libertarianism at its modern apex, the Kochs are trying to wrestle the movement’s leading think tank away from the guy who built it up. (Literally. They just completed a renovation.) How would it change? In the past, Charles Koch and his allies have criticized Cato for lacking real, provable results. Since then, David [Koch] has found tremendous success with Americans for Prosperity, which in the Tea Party era evolved into one of the most powerful conservative organizations in electoral politics. (It has spent seven figures so far this year on TV ads against Barack Obama.) Draw your conclusions.

Whatever the merits of the Kochs’ claim, I cannot understand how their actions can, in any way, advance the cause of individual liberty to which they’ve devoted substantial sums and personal efforts over the years. Even assuming their legal claim has merit, a legal victory will permanently injure the Cato Institute’s reputation.

Many libertarian-leaning organizations receive money from the Kochs and their foundations and are attacked on this basis. Such attacks can be deflected, as financial support is not the same thing as control. But if the Koch brothers themselves represent the controlling majority of an organization’s board, that organization is, by definition, a Koch-run enterprise. Progressive activists and journalists will have a field day with this. They will forevermore characterize the Cato Institute as “Koch-controlled” — and, as a legal matter, they will be correct. No efforts to re-establish the Institute’s credibility or independence will overcome this fact.

[…] Even if one assumes that the Kochs have better ideas for how Cato should direct its resources, know more about how to advance individual liberty, and are correct that the Institute is too “ subject to the personal preferences of individual officers or directors,” any benefit from whatever changes they could make will be outweighed to the permanent damage to Cato’s reputation caused by turning it into a de facto Koch subsidiary. In short, they will have destroyed the Cato Institute to save it.

In the past I’ve defended the Koch brothers from charges that their political activities are motivated by narrow self-interest. Funding scholarships for libertarian college students or sending them to week-long academic seminars are hardly profit-maximizing uses of their money. Though they are famously secretive, the only sensible interpretation of their actions over the past few decades is that they sincerely believe in broadly libertarian ideas and want to see them succeed in the long-run. Their investment in think tanks, journalism, and other non-profits are groping attempts to discover how best to bring that about.

However this takeover attempt seems in no way compatible with the greater good of libertarian ideas. Whatever the legal merits of the Kochs’ claim, the best outcome for the cause of individual liberty is that Cato continues to operate as an independent, non-partisan, respected think tank with a diversity of funders. There is currently no other libertarian organization fulfilling that role in such a high-profile way. In acquiring the asset the Kochs would inevitably decrease its value. This view is, from what I can tell, widely shared among libertarians who have posted about the matter. Perhaps there is something we don’t know, but given how many people involved in institutional libertarianism have benefited at least indirectly from the Kochs’ donations, that dissent should be telling.

I’m left wondering about the internal institutions surrounding the Koch brothers. They are known for their advocacy of Market-Based Management, but do they receive enough criticism within their non-profit work from the bottom-up? Having become accustomed to holding the purse strings, are they open to negative feedback? Do they have advisers who have the security to be able to tell them to back off? If personal animosity is blinding them to the greater good of the causes they’ve spent decades supporting, is there anyone to tell them that?

I don’t know. But the Charles Koch Foundation can be contacted and if you care about the independence of the Cato Institute I’d encourage you to send them a note:

Disclosures: I interned for the Cato Institute in 2003 and later worked in their press office for about a year. I’ve also benefited in various ways from various Koch-funded entities, particularly the Institute for Humane Studies. I no longer benefit in any direct way from either and have great respect and affection for both.

1 thought on “Koch vs. Cato”

Thanks for being a stand up guy, Jacob! This is a very serious matter. It is horrifying to think that short-sightedness would lead people to destroy the reputation for independence and integrity that the Cato Institute has built up, as well as its broad base of financial support, in order to grab a building, which is what they would get. As Steve Chapman of the Chicago Tribune put it, “The Kochs should keep something in mind: It took decades to establish Cato’s reputation. Wrecking it wouldn’t take nearly so long.” http://www.chicagotribune.com/news/opinion/chapman/chi-the-battle-for-the-cato-institute-20120302,0,2666070.story

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Jacob Grier is a freelance writer, bartender, cocktail consultant, and magician in Portland, Oregon, and the author of Cocktails on Tap: The Art of Mixing Spirits and Beer. His articles have appeared in the print or online editions of The Washington Post, The Atlantic, The Daily Beast, The Los Angeles Times, Reason, The Oregonian, Eater, and other publications. [Photo by Michael Ingram.]